How would that be better than holding gold? Fees for large transactions of btc are getting higher than the cost of physically moving gold anyway, and the chances to lose it or get it stolen are higher.
The bitcoin network is best suited for storing and moving large amounts of monetary energy. Compared to any other monetary system, it does this the most efficiently (i.e. with the least amount of energy loss), both during storage and during transfer.
Note that the transfer of monetary value/energy is final settlement (i.e. it's not just an IOU that will be settled at later date, like most bank payments).
Ultimately the base layer network will be used for settlement between banks, national reserve asset/currency etc. and faster, cheaper payment rails will be built on top of it (e.g. the Lightning Network)
The Lightning Network isn’t working as intended and the devs have basically admitted it’s never going to though. I don’t think blockchain as it is built for the btc network is as scalable as you think it can be.
I offered the Lightning Network as a single example. I don't agree with you, but it's largely irrelevant at this stage.
The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is. Once this has happened its value will stabilise and it will become useful as a unit of account/day-to-day currency. By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
> The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is.
You present this as a fact, but the actual valuation of Bitcoin doesn't seem to support this claim. John McAfee bet (and proverbially lost) his testicles on broad estimations of Bitcoin's continued growth. Without extraordinary evidence, you can't make claims of extraordinary provenience.
> there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
If you need an L2 transaction layer to solve an issue inherent to an L1 chain, you're kinda just admitting that the base layer is flawed. Why use Bitcoin at all if we need mediators to settle regular transactions?
The "we'll fix it later" mentality works for shitty altcoins that have nothing to lose by reinventing themselves, but I'm not convinced Bitcoin can change. I was mining Bitcoin about a decade ago now, hearing people say "Lightning will work soon" or "a good interchain bridge will exist eventually" in 2024 leaves me convinced nothing has changed. It's a race between the economics and the technology to see which becomes outdated first.
> If you need an L2 transaction layer to solve an issue inherent to an L1 chain, you're kinda just admitting that the base layer is flawed.
On a similar note, TCP is an admission that IP is flawed. And HTTP is proof that the entire networking stack is a scam.
Clearly, any decent networking protocol would handle any and all information interchange anyone could ever need.
The fact that HTTP is on its third iteration, and it’s still built in top of the same Internet Protocol from 1974, proves that _nothing_ has changed. /s
None of what you said is inherently wrong. Much like the OSI model, if you reinvented Bitcoin today it would look much different.
Unlike the OSI model, Bitcoin's solution to finance is not modular or all-encompassing. If it's not going to adapt to modern demands, it will get replaced. There's no point in keeping around a financial solution that is impossible to fix when it breaks.
The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is.
Your prediction for the future that a ledger with the throughput of a 28.8 modem will absorb the world's value is "fact"?
By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
It has been in the works for a decade and no one wants it. Why would someone use that when any other cryptocurrency (except for ethereum) already do small and fast transactions?
> Your prediction for the future that a ledger with the throughput of a 28.8 modem will absorb the world's value is "fact"?
Yes, the base layer network is ideally suited for storing extremely large amounts of wealth, for large amounts of time. No other asset has qualities that come close, they all leak value compared to bitcoin.
Where did you read this and why did you believe it? There is no technical reason this is true of course, for many reasons, including that many of the earliest coins are clones of bitcoin.
Are you copying some talking points or can you explain on a fundamental level why you believe this?
Fundamentally it comes down to perfect scarcity. If you increase supply, the value in your share leaks into the new supply.
As far as clones. Network effect takes care of that. They would have to be substantially better than bitcoin to beat it and that is extremely unlikely to happen as bitcoin is close to perfect.
All the money in the world will end up in bitcoin, even though it has about 4.5 transactions per second and the throughput of a 28.8 modem, because it was made first? How would this make any sort of logistical or technical sense?
You realize that ethereum already surpasses bitcoin in transactions and litecoin and even dogecoin do too right?
Also you still haven't linked where you are getting these ideas. When you believe in predictions of the future with no evidence and no possibility in reality, that's called religion.
Bitcoin refuses to increase their throughput and at the current rate, everyone on earth gets a single transaction every 50 years. What part of this actually makes sense to you?
I realise everything that you say - I learnt that in the first 5% of my journey learning about bitcoin.
First off, the transactions on the main bitcoin network will be the largest transactions in the world.
All the smaller transactions will take place on different bitcoin networks. Lightning is a decentralised example, VISA and Paypal are centralised examples.
You aren't answering my questions, you're just making the same claims over and over without any explanation.
This sounds like you have been soaked in /r/bitcoin propaganda. You realize that subreddit is completely censored so that anyone who goes against the narrative of more throughput or the absurdity of the lightning network gets banned right? Try going there an questioning the common narrative to experiment for yourself then see what happens.
You aren't confronting why anyone would do what you're saying. Why would anyone transfer money onto a network where they have to pay huge amounts of money to move it around? What problem does that solve? It isn't like people can't already move money around much cheaper than a bitcoin transaction.
The lightning network has been promised for over a decade now. No one uses it because you have to make a little cluster of transactions that have no impact on the actual chain until you pay the enormous fees. That's like a little village coming up with their own currency of swapping IOUs with everyone else and not being able to use their money until they pay $12-$37 to convert it something Other people will use. If your IOU is less that the transaction amount, it's frozen. It's an absurd idea that no one wants.
Most of all you aren't confronting why anyone would put themselves through all this when they could either use traditional finance or other cryptocurrencies. Bitcoin is right now useful for and used for only speculation and nothing else. Knowing that why would anyone put their money into unless they were speculating on it?
Coinbase is a joke as an exchange. Other behemoths exchanges support it, such as Kraken or Binance. But I recommend you p2p exchanges, which don't require KYC, e.g. RoboSats or LNP2Pbot.
Using Bitcoin network to move small amounts of money is akin to using a jumbo jet to go grocery shopping. There are better blockchains out there for small money transfers.
So, I have to go through a multitude of swaps, i.e losses, if Bitcoin is the real deal?! I've tried it, it's even more expensive than doing it directly!
If Bitcoin is a wealth store and I need to convert Bitcoin to USDC, let's say, just to make a payment, or if I get paid in USDC and have to convert it back to Bitcoin to store, then I still need to pay even more than just the Bitcoin fees if I pay directly in Bitcoin or get paid directly in Bitcoin! Often the margin on the crypto currency conversion is higher than the Bitcoin network fees.
True, which is why you do not convert Bitcoin to USDC for each micropayment. You batch all the USDC transactions until you have a sizeable amount to touch Bitcoin network.
Ultimately, I see Bitcoin as Gold. You do not touch your gold savings for buying your daily coffee. For that, you have USDs in your wallet. But you still transact with Gold once in a while when it makes sense.
So, if wires are chaeper in EUR (thanks to SEPA), than even if I want to store my wealth in USD, I need to always sell USD for EUR just to do wires?! That's crazy! It's a patchwork an a scheme, not an alternative to fiat, gold, or stocks!
> So, if wires are chaeper in EUR (thanks to SEPA), than even if I want to store my wealth in USD, I need to always sell USD for EUR just to do wires?! That's crazy!
Indeed it is crazy. Who is advocating for that though?
I do it every week. It's free (Zelle), or it's incredibly cheap. It has predictable cost and timeframe, too, unlike Bitcoin, with no customer service and no way to remediate errors and fraud! So, even if I pay to the banks, it covers people and insurance - unlike with Bitcoin, which just burns fossil fuels so that Chinese miners can get richer and richer stealing subsidized electricity!
That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money?
Think about it, running an exchange has costs. I really don't understand how people can be so easily tricked by "free" offers that are actually more expensive when you do the math. PFOF (i.e. legal theft), unfavorable spread, etc... They get their money one way or another. It can technically make sense when you're trading something like $50 worth of a stock, because of course that would not be reasonable with a brokerage using a traditional fee structure. But frankly trading such low figures is silly. You have to invest a lot of time (=money) in research when stock picking, else you're guaranteed to lose sooner or later. But the reward simply isn't there. Even if you make 100% profit you now have $100. Better put that money into an index fund savings plan and forget about active trading. You're guaranteed to receive a better reward on your investment just getting a part time job selling fast food or something like that.
> That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money?
I was reading a book about that recently, it boils down to: "You're not [just] the customer, you're [also] the product."
Key term: Payment For Order Flow (PFOF) [0], with the book-paragraphs I was thinking of down below:
____________
> Retail investors have one hugely attractive property when considered by a professional – they’re dumb money. Not only are they unlikely to have private information, a lot of the time they haven’t taken care to consider all the public information. When the party on the other side of the trade is a small investor (or a lot of orders from small investors all over the country, ‘bundled’ by a retail stockbroker), you can be reasonably sure that you’re not taking too big a risk that the person selling stock to you knows something about it that you don’t.
> This makes retail orders very valuable to the market. One of the reasons why stock brokerage commissions are so cheap these days is that retail brokers have actually realised how valuable they are. They charge a quite substantial fee to players like the high-frequency traders for the privilege of dealing against their order flow, and they rebate some of this fee to their customers. But the retail orders would eventually dry up if the customers lost too much or felt that they weren’t being given a fair chance. And without a steady flow of ‘dumb money’ lubricating the wheels, the professionals would find it a lot harder to trade, as they’d always suspect each other’s motives for buying or selling.
I pay for Coinbase One - more than I've ever paid to any bank for a year. And what's my benefit? Almost none, because I still have to pay the immense fees!
In crypto, the margins are much wider than in any traditional financial services, which rely on volume and wide adoption!
Coinbase is a centralized exchange, the trading does not happen onchain so the trading itself has nothing to do with crypto, it's fundamentally just like a stock exchange. Onchain trading would be using a decentralized exchange, and that's much cheaper now on Ethereum L2 for example (although still in the experimental phase, slowly getting there). Coinbase is btw one of the more expensive CEX, but I guess you're there paying the higher fees and not with the competition, because they're reputable and unlikely to steal or lose your funds, correct?
The great thing about cryptocurrency is you can trade it any way you like. You can take your tokens in self custody. You can in theory trade with a random guy on the street, without any third party involvement and with zero fees. I know a guy who does this because he's worried about a coming police state, so he buys everything with cash during meetups.
I think the high fees CEX are currently charging, which you're right about, has multiple reasons. One is it's a completely new and largely unregulated space. There are a lot of risks, they need to set aside a lot for litigation. FTX had very low fees for example while stealing customer funds to lobby Washington ;) Coinbase is legit but has to spend a lot on legal fees and compliance, because they're in it for the long run. Also a huge part of the reason is surely simply because they can. Crypto traders are making so much money that they're more likely to accept paying high fees than the average stock trader. That won't last forever, it's just because the market is new and volatility is crazy.
That's what it boils down to - Bitcoin is nothing it promised to be; it's like the equivalent of penny stocks... except that it's quite the opposite in terms if pricing.
Simply divide your BTC into paper wallets in a variety of sizes from $5 to $100, and when you need to make a transaction, mail the right combination of wallets to the person you want to pay.
Mailing costs money, too; it's slow, and there's no proof that I've made the transfer. Plus, if that person wants to consolidate their funds, they will have to pay the crazy costs still, i.e. they will put it into their pricing model! How about comparing apples to apples?!
"Large" here meaning physically large in terms of bytes, it's irrespective of the amount transferred in the tx. If you have high volume in a relatively low number of transactions and are relatively good with input/output hygiene then the actual fees paid probably won't break the bank.
It's accurate to say that lightning makes it's own tradeoffs, but it's not accurate to say it's not Bitcoin.
Every lightning transaction is just a regular bitcoin transaction that could be posted to the chain at any time-- you just don't have to, because the scripting functionality has been used so that if a counterparty posts an earlier state you can effectively cancel it.
The switch to deferring updates unless there is a dispute gives a massive advantage to scaling (e.g. number of tx per second possible goes up the more users there are rather than being a global constant), instantaneouness of transaction irreversability (as fast as the involved parties can make a couple round trips, vs an hour for multiple confirmations), and potentially privacy (since not every update is globally broadcast). But these benefits come at a considerable cost of requiring a degree of active monitoring so if a counterparty posts an outdated state your software can respond, along with additional software complexity, etc.
For some applications the benefits are well worth the costs, for others they aren't.
To say it's not bitcoin is like saying multisignature transactions aren't bitcoin. In both cases they're ways of using the existing functionality. In both cases they require some additional software and different approaches. In both cases they use functionality built into the protocol which was intended for their purposes (payment channels being a concept originally described by Satoshi, and specifically accommodated in the transaction format). And in both cases they change the tradeoff surface somewhat.
